leaders went to the congress and asked for this to be designated as the national museum and because of the scope of the collection and significance amongst other museums in the world congress designated in 2004 the museum as the national museum. >> at 6:30 p.m. historic catherine quitman. >> following her retirement from the army in 1865, she returned to her home of upstate new york where she settled into the role of activist, florida best and solicit funds for aid and veterans benefits and remained active with women's suffrage and other important reform crusades. >> for a complete schedule go to c-span.org. >> on wednesday, the federal reserve announced a quarter% rise in short-term interest

rates. chair of the fed, janet yellen, discuss the reasons in a news briefing. >> good afternoon. today the federal open market committee decided to raise the target range for the federal funded rate by one quarter percentage point bringing it to three quarters to 1%. our decision to make another gradual reduction in the amount of policy accommodation reflects that economies continued progress towards employment and price facility objectives assigned to us by law. for some time the committee is judged with its economic condition anticipated gradual

increases in the federal funds rate would likely be appropriate to achieve and maintain our objectives. today's decision is in line with that view and does not represent a reassessment of the economic outlook or of the appropriate courts for monetary policy. i will have more to say about monetary policy shortly, but first i will review recent economic developments and the outlook. the economy continues to expand at a moderate pace. solid income gains and relatively high levels of consumer sentiment and wealth have supported household spending growth. business investment, which was soft for much of last year has firmed somewhat and business sentiment is at better levels and overall we continue to expect the economy will expand at a moderate pace in the next few years. job gains averaged about 200,000

over the past three months maintaining the solid pace we have seen over the past year. the unemployment rate was 4.7% in february, near its recent low. measures of labor mark underutilization also remain low. participation in the labor force has been little changed on net for about three years. given the underlying downward trend in participation, stemming largely from the aging us population a relatively steady participation rate is a further sign of improving conditions in the labor market. looking ahead we expect the job conditions will strengthen somewhat further. turning to inflation, the 12 month change in the price index for personal consumption expenditures rose to nearly 2% january, up from less than 1% last summer.

that rise was largely driven by energy prices, which have been increasingly after earlier to clients. core inflation, which excludes volatile energy and food prices and tends to be a better indicator of future inflation has been little changed in recent months at about one and three quarters percent. we expect court inflation to move up and overall inflation to stabilize around a 2% over the next couple of years in line with our longer run objective. we now turn to economic projections that we submitted for this meeting by just depends. always participants conditions or projections on their own individual views of appropriate monetary policy of which in turn depends on each participants assessment of the many factors to shape the outlook. the median projection for growth

of inflation adjusted growth domestic product is 2.1% this year and next and down to one point 9% in 2019 likely above estimated longer run rate. the median projection for the unemployment rate ends at four and half percent in the fourth quarter of this year and remains at that level over the next two years, modestly below the median estimate of its longer run normal rate. finally, the meeting inflation projection is 1.9% this year and rises to 2% 2018 and 2019. these economic projections are very little changed from those made in december. returning to monetary policy, the committee judged the modest increase in the federal funds rate is appropriate in light of the economies solid progress

toward our goals of maximum employment and price ability. even after this increase, monetary policy remains accommodative such as supporting some further strengthening in the job market and a sustained return in inflation. today's decision also reflects our view that waiting too long to scale back some accommodations could potentially require us to raise rates rapidly, sometime down the road, which in turn could risk disrupting financial markets and pushing the economy into recession. we continue to expect that the ongoing strength of the economy will warrant to gradual increases in the federal funds rate to achieve and maintain our objectives. that's based on our view that the neutral nominal federal funds rate that is the interest rate that is neither expansionary nor contractionary and keeps the economy operating

on an even keel is currently quite low by historical standards. that means the federal funds rate does not have to rise by all that much to get to a neutral policy stance. we also expect the neutral level of the federal funds rate to rise somewhat over time, meaning additional gradual rate hikes are likely to be appropriate over the next few years to sustain economic expansion. even so, the committee continues to anticipate that the longer run neutral level of the federal funds rate is still likely to remain below levels that prevails in previous decades. this view is consistent with participants projections of appropriate monetary policy. the meeting projection of the federal funds rate is 1.4% of that end of this year. 2.1% at the end of next year and

3% at the end of 2019. in line with this estimated longer run value. compared with the projections made in december, the meeting path for the federal funds rate is essentially unchanged and as always economic outlook is highly uncertain and participants will adjust their assessments with the appropriate path to federal funds rate in response to changes to the economic outlook in views of the risks of their outlook. changes in economic policies including fiscal and other policies could potentially affect the economic outlook. it is still too early to know how these policies will unfold. moreover, fiscal policy is only one of many factors that can influence the outlook. in making our decisions we will continue as always to assess economic conditions relative to our mandate.

as i have noted previously policy is not on a preset course. finally, we will continue to reinvest proceeds from assuring treasury security and principal payments from agency debt and mortgage backed securities this policy by keeping the committees longer-term securities at sizable levels is helped maintain accommodative financial conditions. as a matter of prudent planning we discussed at this meeting a number of issues related to an eventual change to our reinvestment policy. we've made no decisions and we will continue our discussion at subsequent meetings work in keeping with the principal of the process of normalizing will be gradual and predictable. we will provide more information about our plans as it becomes available. thank you and i would be happy to take your questions.

[inaudible question] >> you said you don't want to start pulling the science-- the size of the balance sheet, can you give us a sense of what well under way means in your mind? what kind of hurdles are economic conditions would you like to see? what kind of role do you see the role of the balance sheet plane in the normalization process over the longer term? is it an active tool or passive to? >> lets me start with the second question first. we have emphasized for quite some time that the committee wishes to use variations in set funds rate target or short-term interest rate target as our key

active tool of the policy. we think it's much easier by using that tool to communicate the policy. we have much more experience with it and have a better idea both of the impact on the economy, so while the balance sheet as it purchases tools we could conceivably resort to if we found ourselves in a serious downturn where we were up against the zero balance and faced with substantial weakness in the economy. it's not a tool we would want to use as a routine tulip policy. eu you asked what well under way means. i can't give you a specific answer to that and i think the right way to look at it is in qualitative and not quantitative terms. it doesn't mean some cutoff levels to the federal funds rate

that when we have reached that level week would consider ourselves well underway. i think what we want to have is confidence in the economy's trajectory, a sense that the economy will make progress, that we are not overly worried about downside risk and adverse shocks that could hit the economy. that could quickly after setting it off on shrinking the balance sheet gradually over time cause us to want to begin to add monetary policy accommodations, so i think it has to do with the balance of risk and confidence in the economic outlook and not simply the level of the federal funds rate. [inaudible question] >> you mentioned that you want

to not have to raise rates rapidly if you were to fall behind the curve and the current context gradual has been very very gradual. could you describe what a rapid rate of increases should be and how that should be understood? >> so, i'm not sure i can tell you what a rapid rate of increases. i think that trajectory you see is the meeting in our projections, which this year looks to a total of three increases that certainly qualify as gradual. my comfort is using the term gradual comes back in part to my judgment that the neutral level

of the federal funds rate, namely the level of the federal funds rate that would keep the economy operating on an even keel that the rate will be neither a pressing on the break or pushing on the accelerator. that level of interest rates is quite low, so at present i see monetary policy with accommodative namely. the current level of the federal funds rate is below the neutral rate, but not very far below the neutral rates. we are closing in on our employment objectives and coming closer on our inflation objectives. as we reach those objectives in particularly in light of the fact that we see the risks of the outlook as roughly balanced at this point and that's been our assessment to the last several meetings. it looks to us to be appropriate to gradually raise the federal

funds rate back in the direction of neutral and exactly how many increases is that? the fcc gives you a sense of what committee participants envision in the concrete sense, but if it's one more or one less i think that that still qualifies in my mind as gradual work i think if you compare it with any previous tightening cycle, i remember when rates were raised every meeting starting in 2004 and i think i-- people thought that was a gradual pace. we are not envisioning something like that. >> both the oecd and ims have raised their forecast in part because for the us because of the policies expected from the new administration.

yet, the fed has not and i take it from your comment at the beginning that this forecast it represents no reassessment. has the committee discussed what policy might look like in the event there are large tax cuts passed for infrastructure spending and what might policy look like if those policies become law. finally, why did you remove the word only before the word gradual when you talked about future rate increases? >> we have not discussed in detail potential policy changes that could be put in place and we have not tried to map out what our response would be to particular policy measures. we recognize that there is great uncertainty about the timing, the size, the character of the policy changes that may be put in place and don't think that's the decision or a set of decisions that we need to make

until we know more about what policy changes will go into effect, so i do want to emphasize that while some participants have penciled in some fiscal policy changes into their projections, that the basis for today's decision is simply our assessment of the progress of the economy against our longest established goals of maximum employment and price stability. there is nothing we have done or anticipate that is a speculation i think there is nothing speculation about preemptive responsive to future policy moves. we have plenty of time to see what happens. we did remove the word or in the statement today from gradual. i think this is something that

should not be over interpreted and i regarded as a relatively small change and think it's appropriate for you to consider in the context for example of the fact that our economic projections are virtually identical to those that we issued in december. essentially unchanged both in terms of the path of the economy and the path of the federal funds rate, so we are carried out a modest adjustment of the federal funds rate because we have seen the economy progressing over the last several months in exactly the way we anticipated. we haven't in any way changed our view about where the economy is heading for the risks. we had long said that the-- if the economy progressed and it's been new doing nicely and making

progress and showing resilience and we have confidence in the path the economy is on and if we continue to feel that, we will likely regard it as appropriate to make some further moves to scale back accommodation to move neutral along the lines of the sep. obviously there are surprises with our economic forecast possibly changing, but by the word gradual think it emphasizes that if things continue in the matter we have been going as we have said now, for quite some time we think the gradual increases in the federal funds rate will be appropriate. ..

to meet on a regular basis and i fully expect to have a strong relationship with secretary mnuchin. with a very good discussions about the economy, about our regulatory objectives, the work of the f sock, global economic developers. and i look forward to continuing with him. i was introduced to the president. i had a very brief meeting and appreciated that as well.

>> you said the neutral level of the threat of hunter is quite low. how close do you judge it to be to the inflation rate and what you anticipate will be the force pushing up the neutral interest rate over the next few years? could'vcould fiscal policy be ag the? >> so i give it a number of recent speeches on this topic. when i develop my views more fully. i would say over the longer run that means going seven years out. i think the evidence suggests that t ntral rate may be something in real terms that mibe close to 1% or a little bit under that. that would be consistent with the median and longer run value of the federal funds rate in economic projections for the last several meetings. 3% is the longer run normal federal funds rate that participants estimate in real

terms with the 2% inflation objectives, that's 1% in real terms. and i indicated, why is it so low? i think there's very strong evidence that speculated that this rate has been falling not just in the united states but in many advanced nations. and the decline probably predates the financial crisis. i think in part it reflects slowing population growth and also slow productivity growth here and in many other advanced nations. but some recent work suggests that at the present time the neutral real rate is yet lower than that and some estimates place at around zero in real terms. so i think the lower current rate arguably reflects headwinds that are left over from the

financial crisis. one form of headwind i think has been caution and restraint in risk aversion on the part of households and businesses that have held back spending decisions. i suppose my judgment that it will move up over time reflects a notion that part of that will gradually dissipate over the years. that's the sense of where i think, now, there is uncertainty about the neutral rate. and as you mentioned, it can be affected by shifts in fiscal policy. have a neutral rate is affected by fiscal policy, that really depends importantly on the nature, the size of the physical shift and the affect it has both on-demand and supply in the economy.

>> chair yellen, between the release of the minutes of the previous meeting late last month and your speech in chicago earlier this month, market expectations about an increase in rates today have changed quite dramatically. what happened over the course of those two weeks to make officials who were interested in signaling the idea of raising rates at today's meeting? and why do you think the market was so out of sync with where the central bank was? >> so, when i look at our sequence of communications, they seem to me to have been reasonably consistent over this entire. we had indicated in december that we expect, we saw the risks as balanced, and if the economy continue to progress along the lines we expected, that celebrate increases would likely be appropriate. the minutes of our january

meeting indicated that many participants thought that an increase in the funds rate would be appropriate fairly soon if things continued along those lines. i indicated in my congressional testimony that i thought that indeed the economy was progressing along with our expectations. and as i think all of us, having that expectation, that if the economy continue to progress along the lines that we expected, and we continued tuesday the risks as balanced, do you regard it as appropriate to gradually remove accommodation that's in place. by having several interest rate increases this year, as we saw

the data continue to come in in line with our expectations, my colleagues and i spoke out and indicated that indeed that it been continue to be our expectation. now, when you asked me how did we get out of sync with the market, this is something i try to reflect on a bit in the remarks i made in chicago. and of course it is true that in 2015 and in 2016 each we raised the federal funds rate only once, and perhaps of market participants have been influenced by that pattern. i did try to explain the reasons why we had moved so slowly during those two years. and it reflects i think i set out shocks partly emanating from the global economy, and risks that we saw to the outlook, as

well as more fundamental assessments, reassessments, pertaining to the neutral level of the federal funds rate, and a longer run normal level of the unemployment rate. so i think it's important for the public to understand that we are getting closer to reaching our objectives. the policy is accommodative. also the level of the neutral federal funds rate is probably quite low. we nevertheless, have an accommodative stance of policy,, and it will be appropriate to gradually move toward a neutral stance. if we continue on the path we are on. >> the "new york times." the bank for international settlements has raised concerns that central banks are being insufficiently attentive to asset price inflation and stock market investors in the united

states certainly don't seem to be waiting for the trump administration to implement its fiscal policies. i'm curious to know how much of a concern that is for you. and if not, why not given a remaably elevated leve stock price valuation? >> we do look at financial conditions, in formulating our view with the outlook, and stock prices do figure into financial conditions. so i think the higher-level of stock prices is one factor that looks like it's likely to somewhat boost consumption spending. we also noticed that in the last several months that risk spreads, particularly for corporate issuers, have narrowed, which is another signal that financial conditions have become somewhat easier. now, on the other side,

longer-term interest rates are some -- outside in recent months and the dollar is a little stronger. how does that net out? there are private-sector analysts that produce financial conditions, indices that attempt to aggregate all these different factors affecting financial conditions. and for some of the more prominent analysts and indices, i think the conclusion they have reached is that financial conditions on balance have eased, and that's partly driven by the stock market. so that is a factor that affects the olo marty craig sager, associate press to you and secretary mnuchin will be meeting with her g20 colleagues in germany this weekend. what do you expect to find? do think the group access it will be the world economies are finally out of the woods doing

better, or do you think they're still going to be worries about risks? with one of those risk worries me that the fed might raise rates to quickly? >> we always exchange views on economic outlook in development in our country, and it will be my objective to explain, explain u.s. monetary policy and to try to make the same point to them that i've made here already today about what the outlook is for monetary policy in the united states. i think it's fair to say that the global economy is doing better. it's going a bit more strongly than it was perhaps the last time i got together with my counterparts in the g20, that the risks to look somewhat more balanced, but there remains a set of a significant risk,

medium-term, facing the global economy and i'm sure those will be discussed as well. >> the los angeles times to use a junior and your llgues are making assumptions about stigma to his compulsive but many of the people are, business and consumer confidence has jumped since the election. homebuilder sentiment today was at the highest level since 2005. are you concerned that the effects on the economy at some of his policies such as tax cuts and infrastructure spending don't get enacted or are delayed? >> so, we recognize, our statement actually last time noted that there'd been a marked improvement in business and household sentiment. it's uncertain just how much sentiment actually impacts spending decisions, and i wouldn't say at this point that i've seen hard evidence of any change in spending decisions

based on expectations about the future. we exchange around the table what we learn from our many business context, and i think it's fair to say that many of my colleagues and i note a much more optimistic frame of mind among many businesses in recent months. but i'd say most of the business people that we have talked to also have a wait-and-see attitude and are very helpful that they will be able to pand investment. they are looking forward to doing that, but are waiting to see what will happen. so we watched that and of course if we were to see a major shift in spending reflecting those expectations, that could very well affect the outlook. i am not seeing that at this point, but the shift in sentiment is obvious and notable.

>> kate davidson from dow jones. there's the perception that the fed could somehow stand in the way of some of the economic growth policies that the new administration is pursuing. given that the fed is predicting 1.8% growth in the long run is as a potential point of conflict or the fed and the new administration? >> so, i don't believe it is a point of conflict. we would certainly welcome stronger economic growth in the context of price stability. and its policies were put in place to speed growth that i've certainly urged congress and the administration to consider policies that would boost productivity growth and raise the economies, so-called safe limit or potential to grow, i think those would be very

welcome changes thate woul like to see. >> kathleen hays from bloomberg. i would take the opposite side of this because, this question about market expectations and at the market has got things wrong and then how you say the fed clarified what already said. for example, if you look at the atlanta fed latest gdp track with first-quarter it's down to 0.9%. we had a retail sales report that was mixed. we had upper divisions -- revisions make it look better but the consumer does not appear to be roaring in the first quarter. can he underscored the wait-and-see attitude you just mentioned. if you look at labor compensation you noted are not moving up. and, in fact, there is so may think you look at and use of headset in the past that the fact that that is happening is perhaps an indication there still slack in the labor market. i guess my question is this.

in another sense what happened between december and march? gdp is tracking very well. measures of labor conversation are not threatening to boost inflation in type faster consumer is not picking up very much. fiscal policy we don't know what's going to happen with donald trott, and yet you have to raise rates now. so what is the motivation? the economy is so far from your forecast in terms of gdp, why does it that they have to move now? what does this sentiment about the rest of the year? >> gdp is a pretty noisy indicator. if one averages through several quarters i would describe our economy as one that is been growing around 2% per year. and as you can see from our projections, that something we expect to continue over the next couple of years. now, that piece of growth has been consistent with the pace of job creation that is more rapid

than what is sustainable, if labor force participation begins to move down in line with what we see as this longer run trend with an aging population. now, unemployment hasn't moved that much in part because people have been drawn into the labor force. labor force participation, as i mentioned in my remarks, has been about flat over the last three years. so in that sense the economy has shown over the last several years that it may have had more room to run than some people might have estimated, and that's been good. it's meant without a great deal of job creation over these years. and there could be room left for that to play out further. in fact, policy rate accommodative. we expect further improvement in the labor market.

we expect the unemployment rate to move down further, and to stay down for the next several years. so we do expect that the path of policy we think is appropriate is one that is going to lead to some further strengthening in the labor market. >> just quickly then, i just want to underscore. i want to ask you comes the following that you expected to move. what if it doesn't? what if you don't see wage measures rise? what if the court gd you speak t stuck at 1.77%? your view eris a risk in a medium forecast not, your hikes this year rather than the consensus or more? >> well look, our policy is not set in stone. it is updated dependent and we are not locked into any particular policy path. you know, as you said the data have not notably strengthened.

there's noise always in the data from quarter to quarter, but we haven't changed our view of the outlook. we think we are on same path, not, we haven't boosted the outlook projected faster growth. we think we are moving along the same course we've been on, but it is one that involves gradual tightening in the labor market. i would describe some measures of wage growth is having moved up some, some measures haven't moved up but there's some evidence that wage growth is gradually moving up. which is also suggestive of a strengthening labor market. and we expect policy to remain accommodative now for some time. so we're talking about a gradual path of removing policy accommodation as the economy makes progress. moving toward neutral. we continue to provide accommodation to the economy

that is allowing it to grow at an above trend paceontsisten with further improvement in e labor market. >> john with american banker. a regulatory question if i may. the administrations recently reiterated its support for reinstatement of glass-steagall. treasury secretary niche and has called for the 21st century glass-steagall. keeping in mind that the specifics on this proposal, is the fundamental idea of separating commercial banking from investment banking a fruitful line of inquiry? is this the right path to be pursuing? >> so, i've not seen any concrete proposals along this line. i don't really know what a 21st century glass-steagall would look like. i think my reading on the

financial crisis is that, that wasn't the major source of the financial crisis. in fact, many of the problems emanated from firms that were investment banking units, to me, an important reform in the aftermath of the crisis was to make sure that investment banking activities that were a core part of the shadow banking system where leverage had built, that those were appropriatel capitalized, had appropriate liquidity, and their management was strengthened. and that's what we've tried to do. but obviously we would look at any proposals that are put forward. i'm not aware of anything concrete to react to. [inaudible] >> well, i don't think it was the cause of the financial

crisis, and i do feel that we have significantly strengthened supervision of bank holding companies that incorporate investment banking activities. >> chair yellen come on joe lean with nbc news. i just want know what message are tried to send consumers with this particular rate hike? >> i think that's a great question. i appreciate you asking it. the simple message is the economy is doing well. we have confidence in the robustness of the economy and its resilience to shocks. it's performed well over the last several years -- >> we will eat the remarks from that your janet yellen to go live now to a daylong conference on promoting conservative ideals you will hear from top advisor